Abu Qatada has moved on. Reports that the Muslim cleric has been given a new home, courtesy of the taxpayer, have provoked outrage. As the Tory MP Priti Patel puts it: “It’s disgraceful when there are almost two million families on waiting lists.”

Despite predictable anger at Britain’s least welcome house guest getting so much as a free jelly bean from the state, let alone a comfortable residence, Ms Patel’s statistic implies a greater problem. Homelessness has risen by more than a quarter in three years, with the number of families forced to live in B&Bs, often in conditions reminiscent of the Dickensian workhouse, up by 57 per cent in the past 12 months. Many of those languishing on Ms Patel’s lists wait for a home much as Vladimir and Estragon, the protagonists of Samuel Beckett’s absurdist play, waited for the non-arrival of Godot.

On Shelter’s estimate, 75,000 children will wake up on Christmas Day without a home. This is not, however, a hard luck story about the poor. Millions of young people are now realising that their hopes of buying their own homes will be unfulfilled, perhaps for ever.

Stagnant wages, rocketing property costs and a mortgage moratorium mean the average first-time buyer in London is now 37. Census figures published yesterday show that house-building fell by four per cent between 2001 and 2011, while the numbers renting from private landlords rose from nine to 15 per cent. Such shifts make housing the ultimate one-nation issue. The young professional living in a childhood bedroom has a link, albeit distant, to the human bundle swaddled in cardboard and sleeping in a frozen underpass. Neither can envisage owning, or in some cases even renting, a home of their own.

The central problem is too little building. If the trends of the past two decades continue, then demand for housing will outstrip supply by 750,000 homes by 2025, according to a new report by the Institute for Public Policy Research. Of the 88 per cent of 18- to 30-year-olds who told the institute that they hoped to own their own home within 10 years, the majority will see their hopes thwarted.

At the far end of the spectrum lie those whose only permanent address is likely to be Desolation Row. Their chances just got worse with the signal, in the Chancellor’s Autumn Statement, of the breaking of the historic link between the cost of renting and housing benefits. Housing allowance, the benefit paid direct to landlords, would be increased by 2.2 per cent in April and be capped at one per cent in subsequent years.

Arcane laws stipulating that vagabonds be “commanded to avoid the town” will be rehashed, with a churn of homeless families moved to the cheapest areas, irrespective of whether there is any work. New strictures to be introduced in April include a cap of £500 a week on all benefits, housing included. While the focus has been on the (very few) supposed welfare oligarchs living in expensive inner London, the real financial scandal has gone unnoticed.

As one shadow minister, Karen Buck, points out, recent government forecasts predicted that £35 billion would be spent subsidising private rents between 2011 and 2015, meaning the taxpayer will pay £12 billion more on supporting low-income households renting in the private sector than in the preceding four-year period.

Whatever small savings come from welfare crackdowns, the only winners will be the private landlords now demanding extortionate rents from benefit claimants and from young people forced to shelve any idea of buying their own homes. This week, Labour promised, as part of its policy review, to consult on forcing landlords to give longer tenancies and “predictable” rents.

The question is why – since the state is picking up much of the tab – it should not revert to the old practice of forcing modern Rachmans to cap their rent at reasonable levels. The wider problem, which Labour should have done far more to rectify when it was in office, is the dearth of affordable social housing.

All parties are scurrying to remedy that deficit. George Osborne promised 120,000 new homes in the Autumn Statement, and the housing minister, Mark Prisk, insists that the Government is “pulling out all the stops to get Britain building and deliver the homes the country needs”. Belatedly, the Tories have realised that, with a crisis imminent, the only “shovel-ready” project risks being their own grave.

But even if you leave aside the dead hand of recession, there is little consensus on what is needed. Nick Boles, the planning minister, last week attracted criticism for a plan that neglected brownfield sites and the 400,000 fallow plots that already have planning permission. By blaming Labour’s immigration policy (while forgetting to mention that immigrants also pay their taxes and benefit the economy), Mr Boles appeared to advocate diminishing both the green belt and good community relations.

Although Ed Balls has done his best to compel colleagues to back more social housing, the shadow housing minister, Jack Dromey, admits that “housing has not been sufficiently centre-stage for a very long time”. It will, he promises, be a key election issue for Labour, which looks unwilling to buy the myth that hacking benefits offers even a partial answer. Ed Miliband’s refusal to say whether he will vote against the plan to cap welfare payments to 1 per cent is almost certainly based on a reluctance to play into the hands of a cunning Chancellor who is likely to tweak his proposals to set a trap for Labour once he knows their intentions.

If the proposal, as outlined in the Autumn Statement, is unchanged, I understand that Mr Miliband will refuse to back it. Mr Balls said as much at Treasury questions yesterday. It is not only shabby but self-defeating for Labour doubters to say there are no votes in courting the poor when housing offers an example of a blight uniting all classes.

Even those unlikely to join the 2,200 people who sleep rough in the streets – a rise of one fifth in a year – are sucked into a world of blight, in which rising rents and rising damp are symptoms of a deeper malaise. Some young people who talked to the Institute for Public Policy Research spoke of how they were deferring getting married or having children; others said they had no sense of belonging or commitment to the area in which they lived. These are not the vagrants of tomorrow but the bank managers, the teachers and the potential backbone of the communities that bind Britain together.

Like the houses and flats that Generation Rent cannot and may never afford, that sense of belonging is beyond price. If it is to be restored, then rents must be brought down and investment shifted from welfare (and the pockets of unscrupulous landlords) into building the homes that Britain needs so desperately.

As the festive season begins, remember the new homeless and forget the wedge being falsely driven between strivers and supposed scroungers. Those who cannot find a job, the working poor and a generation who once dreamed that success meant stability are all discovering, as Christmas approaches, that there is no room at the inn.